VMworld is one of the most alive places to be for technology people, with more than 17,000 attendees. Infrastructure virtualization is a strategic imperative, and the cost case is well understood. Wikibon has done significant work in defining that compelling case. VMware is the leading virtualization platform, both in function and market share.
VMware has announced a much broader vision for virtualization. It has announced the vCloud Director (vCD), which aims to break the virtual world completely from the physical world. vCD creates “Provider” and “Organization” constructs and a management framework for the suppliers and consumers of resources. VMware has a security platform with vShield, a Network platform and a development platform with SpringSource. APIs abound. VMWare is building a Cadillac, with the Mainframe as its model. For VMware, cloud services and VMware are synonymous, for both Enterprise users and Cloud service providers.
Under the blue skies of California, Wikibon believes there tectonic shifts are occurring. The fault-line is between the service providers and VMware.
True Market Drivers
Virtualization allows workloads to be run much more efficiently, and workloads to be moved logically and physically much more easily. This flexibility and cost reduction has allowed service providers to offer a broad range of cloud services, from pure infrastructure to storage services to application services. The services are easy to set up and the user can easily understand the costs. Above all, service providers must be very cost competitive with enterprise IT shops, and with each other.
This is both an opportunity and a threat to enterprise IT shops. IT has an opportunity to use a vastly increased number of services from the outside. At the same time, the service providers are putting enormous pressure on IT shops to provide similar services to their own organizations at competitive costs. IT is rapidly innovating in platforms (Infrastructure 2.0), IT organization and outsourcing.
The reason for the fault line is that service providers do not and will not behave like enterprise IT. Service providers have different requirements.
Service Provider Requirements
Service providers are completely different from enterprise IT. Service providers have to provide the cheapest computing platform in a very competitive market. They are experts at integrating technologies. They provide what the market wants; some service providers will offer a Cadillac. Most buyers will want a Cadillac, but the majority will purchase Model T Fords.
Service providers are at the leading edge of virtualization and Infrastructure 2.0. They have the scale, the bandwidth, the skills and the focus to drive down the cost of providing infrastructure and other services. Service providers do not care what is under the hood, as long as it works reliably and is low cost. VMware, Microsoft Hyper-V, IBM Lpars, Xen or magic ping-pong balls are all good, especially if they are free.
3PAR learnt that selling to service providers requires a completely different sales approach. They carved out a special program, listened and understood what the service providers wanted and understood their requirements for multi-tenancy and efficiency. That success in selling to service providers is one of the main reasons for 3PARS $2B valuation.
Wikibon would suggest that VMware think about adopting a similar approach. And they should remember that a nanosecond is the half-life of gratitude from a service provider.
Action Item: Senior IT executives should not expect that service providers will or should use the same virtualization tools as they do. It is and always will be expensive to move most workloads from one location to another, and the further the distance the greater the cost. The number of such moves should and will be limited. When required, it should be possible to migrate work outside easily and back again, and possible to migrate work from one service provider to another; an aid to negotiation rather than a desire to exercise. Service providers can provide those capabilities without requiring a common infrastructure.